The Merchandise Mart will be the site of a 50,000-square-foot technology center that will open this spring to provide collaborative working space for digital and technology entrepreneurs, the center’s backers announced Wednesday.
The venture, to be run as a non-profit by the Chicagoland Entrepreneurial Center (CEC), is aimed at enhancing the growth and visibility of Chicago’s fast-growing tech community, which saw 124 digital startups launch last year – a 51 percent increase from 2010, according to data provided by Chicago venture and startup sources.
That growth is on pace for another 50 percent jump this year, said Matt Moog, entrepreneur, chairman of the project, CEO of Viewpoints Network and head of tech networking group BuiltInChicago.org.
“There is a new digital technology company starting every other day in the city of Chicago,” Moog said at a news conference to unveil the tech center.
The center, to be called 1871 (1871.com) – reflecting Chicago’s can-do rebuilding spirit after the Great Chicago Fire of that year – will open this spring on the Mart’s 12th floor.
The center aims to house as many as 400 startups who have viable ideas and are looking to grow and hire, but need access to capital, new ideas and a community, Moog said.
Startups may apply for space at www.1871.com. An independent board yet to be named will judge the applications.
The “smart work” center is being fashioned by Gensler architects to enable startups to rent desks and flexible workspace, and have a common area for major events, educational courses and other programs. A reserved desk will rent for $400 a month, and a shared coworking space will rent for $250 a month. The tenants may use lunchrooms, quiet rooms, conference rooms, whiteboard space and see-through walls that may be used as whiteboards.
TechAmerica, a tech-industry trade association, will move its Midwest regional office into the 1871 Center from its current Naperville site, relocating two employees and adding a third.
“We are excited to make this the new center of all activities related to innovation and technology in our state,” said Ed Longanecker, TechAmerica Midwest executive director. TechAmerica will keep its Springfield office in the capital.
Initial funding supporters are Comcast, the networking router company Cisco Systems, venture capitalist J.B. Pritzker and the state of Illinois.
Comcast will give the center’s tenants free access to its high-speed metro Ethernet Internet service and will provide TV service in the common areas, said Jeffrey M. Buzzelli, regional vice president for Comcast Business Services.
Unlike conventional technology incubators, the center will take no equity stake in the companies housed inside it. Center operators hope that the startups will be successful enough to expand elsewhere within a year or so, Moog said.
“The idea is this is a jumping-off point,” Moog said.
Kevin Willer, CEO of the Chicagoland Entrepreneurial Center, said the Merchandise Mart has another 120,000 square feet adjacent to the tech center that could be used for future expansion.
The center, whose budget is not yet being made public, is expected to house some angel and venture capital firms to allow the startups easy access to potential capital. Last year, 14 Chicago startups raised a collective $250 million, and when daily deals site Groupon is added, the total leapt to $1.4 billion.
The center’s lease at the Merchandise Mart is for 12 years.
Also Wednesday, TechNexus, Chicago’s five-year-old tech collaborative and incubator space, announced that more than 130 companies have grown at its facility at 200 S. Wacker Drive, and those companies have gone on to create 400 jobs and to raise $75 million in investment capital.